Estimated 30 Million to Get Insurance, Firms Face New Taxes; Christmas Eve Clash

WASHINGTON—The Democratic-controlled Senate, voting 60-40, swept aside Republican objections and moved to close off debate on health overhaul legislation, marking a milestone moment for President Barack Obama's most pressing domestic initiative.

All 58 Democrats and two independents voted to approve the first -- and most crucial -- of three motions needed to break off action, as the Senate entered a fourth week of debate on the bill. All Republicans voted no.

The roll call, which began shortly after 1 a.m. Monday, was effectively a test vote for the sweeping bill. The action made clear the White House has enough votes to ensure passage -- likely on Christmas Eve -- of the broadest health legislation in a generation. The measure would ensure that some 30 million Americans will gain insurance coverage over the next decade, while taxes will rise on groups ranging from medical-device makers to customers of tanning salons.

Mr. Obama said Monday that the Senate action was "big victory for the American people." He said the bill would reduce the deficit long term, countering criticism that the legislation is too expensive.

The more than 2,000-page Senate bill needs to be reconciled with House-passed legislation, but is likely to form the core of any final bill presented to the president for his signature.

With the vote looming, Senate Minority Leader Mitch McConnell (R., Ky.) urged "Democrats to put party loyalty aside" and join with Republicans in derailing the bill. "It's not too late," he said, warning Democrats they would pay a price for moving the bill. "The impact of this vote will long outlive this one frantic, snowy weekend in Washington."

Democrats accused Republicans of engaging in scare tactics and insisted the legislation – while not popular in opinion polls – would meet an urgent national need. "We're going to move forward," said Sen. Tom Harkin (D., Iowa). "We're not going to vote fear. We're going to vote hope."

Months in the making, the Senate bill would sharply expand Medicaid -- the federal-state health program for the poor -- and create tax subsidies to help low- and middle-income people comply with a new mandate to carry insurance.

After a marathon negotiating session, the strong abortion rights opponent, Ben Nelson, agreed to provide the 60th and deciding vote the Democrats will need to get its healthcare bill through the Senate. Video courtesy of Reuters.

The Senate bill would generally leave the existing employer-based health-insurance system intact. Americans who already have coverage on the job wouldn't be likely to see big immediate changes. Larger companies would be required to pay a fee to the government if they didn't offer affordable insurance to employees and if the employees later sought government help paying for insurance.

Last-minute additions toughened restrictions on insurers. Starting next year, they would be barred from denying coverage to children with pre-existing conditions. As before, that provision would apply to adults starting in 2014. The bill would create a national exchange, or marketplace, where individuals and small businesses could buy insurance.

To pay for the program, the measure would impose cuts of some $480 billion over a decade in payments to providers of Medicare, the federal health program for the elderly and disabled. The provision is at the core of Republican objections. The bill also would impose new fees of billions of dollars a year on insurers, medical-device makers, pharmaceutical makers and others. And it would establish a tax on insurers offering high-value health policies.

Another late change would hit customers of indoor tanning salons, who would pay a 10% tax. That replaced a proposed tax on cosmetic surgery, which was projected to raise about $5 billion over a decade. The Senate bill doesn't directly affect income taxes.

The Congressional Budget Office estimated the bill would cost $871 billion over a decade and leave 31 million fewer people uninsured than if current law were in place -- although 23 million Americans, many on the edges of society, would still be uninsured. It projected the bill would hold federal deficits to $132 billion less than they otherwise would be over a decade, owing to new taxes and other changes.

If the Senate bill passes and goes to a conference committee with the House, as expected, the House is likely to do most of the reconciling. That's because Senate Majority Leader Harry Reid -- after battling for weeks to get the minimum number of votes needed to avert a Republican filibuster -- has little room to maneuver. The House passed its version on Nov. 7 on a 220-215 vote.

President Obama hopes to sign a final bill before his State of the Union address after the first of the year so he can turn to other issues, in particular the economy and jobs, in a bid to boost support for Democrats in the 2010 elections.

A flurry of weekend deal making amid a December snowstorm locked in the final elements of the Senate bill and got the support of the last Democratic holdout, Ben Nelson of Nebraska. He won a tightening of rules to ensure that no federal money allocated under the bill is used to fund abortions, and got more money for his state in the Medicaid program.

Democratic leaders also threw in $10 billion in spending on community health centers, a nod to liberals. The agreements set the stage for Monday's key procedural vote.

The issue is likely to define the battle lines of the 2010 midterm elections, given the partisan nature of the Senate vote.

Republicans said the legislation would impose big costs on government and taxpayers, and they denounced Mr. Nelson. Sen. Tom Coburn (R., Okla.), speaking on the Senate floor Sunday as the chamber spent a third weekend in a row tackling health care, labeled the Nebraskan's deal the "full Nelson." He added: "It's a shame the only way we can come to a consensus in this country is to buy votes."

Asked about Republican charges that Nebraska received special attention, Sen. Nelson said he was simply trying to deal with the potential budget problems the Medicaid expansion would create for his state. "I didn't ask for a special favor here. I didn't ask for a carve-out," he said on CNN's "State of the Union." He added the state's governor complained "publicly he's having trouble with the budget."

In the coming negotiations, the House will almost certainly be forced to give up the government-run insurance plan that is part of its bill. The idea failed in the upper chamber after centrists including Connecticut independent Joseph Lieberman drew a line in the sand against it.

The final bill is also likely to embrace a version of the Senate's proposed tax on high-value insurance plans, rather than add a surtax on the wealthy, as the House wanted.

Speaker Nancy Pelosi (D., Calif.) and House Majority Leader Steny Hoyer (D., Md.) said they intend to reconcile the bills and send final legislation to the president as soon as possible.

Polls show dwindling support for the Democrats' health-insurance overhaul. Yvonne Rankin, a 42-year-old Batesville, Ark., resident who is uninsured, said she initially liked the Democrats' health proposals because she thought they would give her access to affordable insurance.

She said she began changing her mind about six weeks ago when she heard about the Medicare-payment cuts, since her mother relies on the program.

"I just don't know what's going to be in it for me," said Ms. Rankin, a student who identified herself as an independent.

Democrats moved over the weekend to shore up support among lawmakers and the public, releasing a 383-page amendment to their Senate bill that included proposals meant to help small businesses. For small employers, the amendment moved up the effective date of new health-insurance tax credits by one year to 2010. The amendment requires insurers to spend at least a minimum percentage of their revenue on health-care services, effectively limiting profits.

Republicans demanded the amendment be read aloud in full on the Senate floor. Throughout Saturday, clerks took turns reading to a nearly empty chamber, in a gesture Republicans hoped would dramatize the closed-door dealings by Democrats.

The American Hospital Association came out in support of the bill Sunday, saying it likes how the bill expands coverage and provides more competition for insurers. However, the group said it wants to lessen the payment cuts hospitals face under the bill and is concerned the bill unfairly penalizes hospitals for readmitting patients.

The American Medical Association, which has backed some earlier versions of the health overhaul, held off on endorsing the Senate bill. But association President J. James Rohack said he was pleased the bill addressed issues the AMA had raised, including the tax on cosmetic surgery.

Insurers have opposed the Senate health bill. They say it would raise premiums by bringing more ill people into the system while letting healthy people stay uninsured if they pay a relatively small fine. "There have been some modest improvements," said WellPoint Inc.'s chief of strategy, Brad Fluegel. "The individual coverage requirement is stronger and the pilot programs on cost containment have been accelerated. But at its core it will still wind up increasing costs"

Republicans and their allies exhorted supporters to rally against the bill. Texas Sen. John Cornyn, who heads the campaign arm of Senate Republicans, pressed supporters to lobby "moderate Democrats to oppose" the bill.

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